“British Telecommunications plc v HMRC – No reasonable prospect of success for claims for VAT relief on bad debts “

The UT dismissed BT’s appeal against the strike-out order. It held that EU law principles required the taxpayer’s directly effective EU law rights to be exercised under the domestic regime (suitably moulded to give effect to those rights). The pre-section 80 regime, appropriately applied, was the appropriate mechanism for the exercise of these rights, and not section 80(1) (this had already been determined by the CA in the related GMAC appeal) Neither section 80(1), nor section 80(1B), had been engaged. Section 80(1B) applied to payments ‘by way of VAT which was not VAT due to [HMRC]’, which was not the case here (as VAT had been due at the time of the supply – it was a retrospective relief in respect of a bad debt that was being claimed).The UT also considered that the issues had been determined by the CA in favour of HMRC and that the matter was therefore res judicata and BT was estopped from pursuing the issue.

Source: rpc.co.uk

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